Whether you are considering refinancing student loans or not you should know that it is a good way towards securing your economic future. The only problem is you aren’t guaranteed to be approved by every private lender, and there isn’t a guaranteed list of the easiest student loans to get approved for. There are eligibility requirements that need to be met before a lending company can approve you. If you happen to be denied by one lending company, keep in mind that you can always reapply down the road, or you can always try another lending company.
Why Did it Happen?
The good thing about being denied is that lending companies are required to give you the reason for your denial. There are many reasons why this could happen. One example is that your income is simply too low compared to their standards. Most companies do not supply a minimum income, but it is assumed that they consider this to be a significant influence in their decision. Along with this, credit score or credit history is heavily considered in an application. If you have a low credit score, then your debt-to-income ratio could be too high, prompting the company to deny you. You might have an employment history that isn’t sufficient for the company, or you could have a long history of missing your payments. These are just a few common factors that influence credit score. So, what can you do to avoid the pitfall of rejection?
Once the lending company has given you the reason for the denial, you can take that information with you while shopping around for a new lender that offers student loan refinancing. Another lending company might have looser restrictions that will allow you to get approved. Another option you have at your disposal is to get a cosigner. This will assuage the lending company’s fears over repayment and will make it more likely for you to get approved.
Build Your Income
One of the simplest, but maybe not easiest, ways you can solve your approval problem is by increasing your income. If you deserve a raise, asking for more money at work can definitely do the trick. If it doesn’t seem like this will be possible for you, consider making some extra money on the side. This can be your opportunity to do a little freelancing and really engage your creativity. That will have the dual benefit of making it more likely for you to be approved while also allowing you to put a little extra aside for a rainy day.
Pay Your Debts
It might be difficult, but it’s always a good idea to take a little extra after a payday and pay down some of your debts. The fewer debts you have to worry about, the more likely you’ll be approved by a lending company. This is where a detailed budget will come in handy, tracking your spending in full so you see where you can improve. It only takes little steps to really make a difference here.
Author: Jeff Gitlen
Join the LendEDU Newsletter
News, insights, & tips once a weekThanks for submittingPlease Enter a valid email
Student Loan Guides
Student Loan Reviews